Employee bonus paid out as 401(k) SH Match

An employer wants to pay end of year bonuses to employees based on a percentage of revenue they brought in to the company.   This company also has a 401(k) plan with a dollar for dollar safe harbor match up to 4% of compensation.   The owner wants to count the employer safe harbor match as part of the bonus. 

For example, employee Z is due an $8,000 bonus.  Employee Z is also due a $2,400 safe harbor match based on his deferrals into the plan during the year.   The employer says the bonus is $8,000 minus the $2,400 safe harbor match that will be made on behalf of employee Z = $5,600 remaining bonus to be paid in cash to employee Z.    So, employees that get a bonus and do not defer into the plan get their full bonus in cash.

Is this allowed, legally?   If it is not allowed, can anyone provide a reference to a statute or something so we can explain to the owner why this is not allowed?

Thank you!

Could be a problem with the contingent benefit rule in 1.401(k)-1(e)(6). If two employees would both be eligible to receive the same bonus, but one of them receives a smaller bonus or no bonus at all because they deferred into the plan (and consequently received a match) then the contingent benefit rule is violated because the other employee received some other benefit as a result of their election not to defer.

Thank you!    It just feels like it's not a good choice and I want to encourage the employer to see the SH Match and the Bonus as two separate benefits and not link them together.  This may help me convince them.

Thanks for your insight!